TOKYO, Feb 5 — The dollar held on to recent gains against its peers today, supported by a recovery in investor risk appetite, which helped push up US yields during the previous session.
The dollar index, which measures the greenback against a basket of six major currencies, was barely changed at 95.828 after gaining for three straight sessions.
“The overly pessimistic view on developed economies and the overly dovish view on the (Federal Reserve) is being unwound,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
Trading was likely to remain subdued in Asia with many markets across the region closed for Lunar New Year holidays for much of the week.
The index rose 0.7 per cent after dipping last week below its 200-day moving average for the first time since early January 2018.
It gained as Treasury yields rose with that of the 10-year jumping 9 basis points over the past two sessions.
Yields have climbed after MSCI’s gauge of global stocks hit a two-month high yesterday as optimism over recently concluded US-China trade talks helped send US technology and industrial shares higher.
Against the Japanese yen, the dollar gained a tad to ¥109.98. It had briefly risen above ¥110 for the first time since December 31 overnight.
“There’s further room to rise for the US two-year yield. If this move continues, dollar/yen will rise above 110” again, said Mizuho’s Yamamoto.
The euro was flat at US$1.1437 (RM4.67), off three-week high of US$1.15145 set on Thursday.
The Australian dollar slipped 0.4 per cent to US$0.7199 as retail sales for December came in weaker than expected, and ahead of a policy decision by the Reserve Bank of Australia later in the day.
The RBA is widely expected to keep interest rates on hold, though some market players now expect a cut later this year due to mounting signs of economic weakness.
Sterling was basically flat at US$1.3038 after seesawing during the previous session on uncertainty over the way Britain will leave the European Union.
In late Monday trade, sterling gave up gains made earlier in the day after a newspaper report said that goods shipped to Britain from the European Union could be waved through without checks in the event of a “no-deal” Brexit.
The Canadian dollar was a shade weaker against the greenback.
It also fell one tenth of a per cent overnight, reversing some of last week’s rally, as oil prices fell and the greenback broadly climbed. — Reuters
